FEATURE
agency staff. This was not a minor liability issue – it was a medical malpractice claim.
Legal and expert costs escalated quickly. MAR charts, care plans, training records and staff rotas were scrutinised in detail. As is oſten the case, gaps in documentation made defence difficult despite there being no intent to cause harm. The claim ultimately settled at over £450,000, with total insurer outlay exceeding £500,000 – all stemming from a single medication error.
THE REAL-WORLD IMPACT OF UNDERINSURANCE
If a care provider faces a malpractice claim that exceeds their policy limit, they are liable for the remainder. That can mean covering hundreds of thousands of pounds out of pocket, with serious implications for business continuity.
Equally concerning is the risk of contract non-compliance. If a provider is found to have misrepresented the scope of their insurance – even unintentionally – they may be removed from public frameworks or fail future tenders. In a sector where public funding is oſten critical, that poses a serious commercial threat.
NOT ALL POLICIES ARE CREATED EQUAL
The challenge does not stop at policy limits. Some care insurance products restrict malpractice cover to ‘treatment risk’ only, while others are silent on issues such as abuse allegations or liability involving third-party medical professionals.
This complexity underlines the need for specialist advice. Many general insurance brokers do not have the depth of sector knowledge required to interpret these nuances. That is not a criticism – it reflects the unique regulatory and operational environment in which care homes operate.
A SIMPLE PROBLEM TO SOLVE, IF TACKLED EARLY
The good news is that this is a manageable issue if addressed proactively. Reviewing malpractice cover before renewal is straightforward and can prevent significant stress, cost and disruption.
It requires checking whether malpractice is listed separately, what the stated limit is, and whether it aligns with contractual expectations and day-to-day care delivery. Where gaps are identified, they can often be corrected through mid-term adjustments or at renewal. The additional premium required to increase malpractice cover from £5m to £10m is typically modest when weighed against the potential consequences.
At Acrisure, we regularly uncover malpractice underinsurance that has gone unnoticed for years - not due to negligence, but because no one had asked the right questions.
AND FINALLY…
In today’s care environment, insurance is not just a legal requirement, it is a vital business enabler. Medical malpractice cover, in particular, must be reviewed rather than assumed.
The consequences of underinsurance can be severe, from uncovered claims to lost contracts. But with early review, proper structuring and expert advice, it is an entirely preventable risk.
If your policy has not been reviewed in the past 12 months, or if you are unsure what your malpractice limit actually is, now is the time to check. It is a small step that could protect your care home – and your reputation – for years to come.
www.acrisure.co.uk/broking/care
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www.tomorrowscare.co.uk
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